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Nikkei turns lower as yen's rise hits exporters

* Yen's rise triggers profit-taking, futures selling

* Exporters lead declines

By Ayai Tomisawa

TOKYO, Oct 23 (Reuters) - Japan's Nikkei share average

turned lower on Wednesday afternoon, as exporters were hit after

the dollar weakened against the yen on heightened expectations

the Federal Reserve will keep its stimulus in place until early

next year.

The Nikkei dropped 1.2 percent to 14,530.24 in early

afternoon trade, retreating from a 3-1/2 week high of 14,799.28

hit in the morning.

Traders said that futures selling was triggered by weakness

in the dollar, which slipped 0.5 percent to 97.47 yen.

The dollar's weakness was triggered by a soft U.S. jobs report

on Tuesday, which cemented the view the Fed will delay winding

back its bond-buying stimulus until next year.

"Futures moved in reaction" to the rise in the yen, said a

trader at a foreign brokerage, adding that selling accelerated

when the index breached below a stop-loss level at 14,580.

Exporters dropped, with Honda Motor Co falling 2.4

percent, Sony Corp off 1.7 percent and Panasonic Corp

shedding 1.7 percent.

A stronger yen erodes Japanese exporters' competitiveness


Against the yen, the euro also slipped 0.4 percent to 134.72


"It's the yen rising against both the dollar and the euro,"

said Shigemitsu Tsuruta, a senior strategist at SMBC Friend

Securities. "There were signs that the Japanese market was

overbought, so investors used the yen's rise as a reason to take


The Topix shed 0.8 percent to 1,204.42.